Interest rates during a recession

mowerman2

My wife and I will need an Equity Release Mortgage in about 2 to 3 years time – when our savings are depleted. (About £100K against current property value of £800K)
Interest rates have shot up in recent times. I’m convinced we’re in or heading for a deep recession when from my past experience interest rates tumble. Would I be right in postponing an ERM until rates are lower? Thoughts?

 

ader42

Personally I expect rates to revert to nearer the historical mean average (BOE base rate being 6.8%) - i.e. mortgage rates being around 6% to 7% and base rate being about 5% so on that basis probably not much different from now apart from the lenders having a lower margin…

No-one really knows.

On the topic of ERMs I would have thought it far more sensible to just downsize to release equity… 

housebuyer143

In a recession rates do normally tumble, but we have very high inflation so they can't really afford to lower them, at least not yet. 

dunstonh

Interest rates have shot up in recent times. I’m convinced we’re in or heading for a deep recession when from my past experience interest rates tumble. Would I be right in postponing an ERM until rates are lower? Thoughts?

Interest rates and recessions are not directly linked.   You could have a recession with low interest rates (as has been the case more often in the last two decades) and recessions with high interest rates.  The cause of the recession and the chosen methods to stimulate the economy will impact on what happens next.

mowerman2

ader42 said:

On the topic of ERMs I would have thought it far more sensible to just downsize to release equity…

 

I partially agree but with stamp duty plus the total cost of moving home and the upheaval it becomes a balancing act which we can only assess at the time.